Commission Decision No 659/2000/ECSC of 30 March 2000 amending Decision No 2136/97/ECSC on administering certain restrictions on imports of certain steel products from the Russian Federation
Date: 2000-03-30
Institutions: European Commission
Subjects: USSR, cooperation agreement (EU), economic sanctions, import restriction, iron and steel product

31.3.2000

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Official Journal of the European Communities

L 80/11

COMMISSION DECISION No 659/2000/ECSC

of 30 March 2000

amending Decision No 2136/97/ECSC on administering certain restrictions on imports of certain
steel products from the Russian Federation

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(4)

Having regard to the treaty establishing the European Coal and
Steel Community, and in particular the first paragraph of
Article 95 thereof,

consulting the ECSC Consultative Committee and

After
obtaining the unanimous agreement of the Council,

(5)

Whereas:

(1)

(2)

(3)

Commission Decision No 2136/97/ECSC of 12
September 1997 on administering certain restrictions on
imports of certain steel products from the Russian
Federation (1), as last amended by Decision No 2124/98/
ECSC (2), implements in Community law the provisions
of the Agreement between the European Coal and Steel
Community and the Russian Federation on trade in
(hereinafter the ‘Steel Agree-
certain steel products (3)
ment’). The Steel Agreement was concluded in the wider
framework, and provided for in Article 21 of the Agree-
ment on partnership and cooperation (PCA) establishing
a partnership between the European Communities and
their member States, of one part, and the Russian
Federation of the part (4).

Several Declarations are attached as integral parts to the
Steel Agreement. Declaration No 3, in particular, states
that ‘in the context of the Agreement [...], the Parties
agree that they shall not apply with respect to the other
Party quantitative restrictions, customs duties, charges or
any similiar measures on the export of ferrous waste and
scrap under the Combined Nomenclature heading 7204
[...].’

On 16 April 1999, the Russian Government adopted a
Decree (5)
imposing a 15 % customs duty (with a
minimum charge of EUR 15/tonne) on exports of iron
and steel scrap for a period of six months. The intention,
as stated in the Decree, was to prevent diversion of the
raw materials needed for steel production and to main-
tain minimum levels of production from Russian steel
plants.

At the 17 May meeting of the Cooperation Council, the
Community delegation passed a memorandum to the
Russian delegation expressing its concerns regarding the
Decree. This memorandum called for the export tax on
iron scrap to be dropped forthwith on the grounds of its
incompatibility with the Steel Agreement.

At the request of the Russian authorities, the Partnership
and Cooperation Agreement coal and steel contact
group and the subcommittee on steel, coal, mining and
raw materials were convened in Brussels in June for
consultations focusing particularly on Russia's export
duty on iron scrap. The Commission delegation clearly
stated that it regarded the measure as a violation of both
the Steel Agreement and the Partnership and Coopera-
tion Agreement. In the absence of a satisfactory solution,
it reserved the right to make use of the dispute settle-
ment provisions and take retaliatory measures under the
latter.

(6)

(7)

(8)

The Community delegation expounded the same objec-
tions regarding the Decree at the meeting of the EU/
Russia Cooperation Committee in Brussels on 8 October
1999.

Notwithstanding all these consultations, on 28 October
1999 the Russian Government extended by six months
the original decree imposing a customs duty on exprots
of iron and steel scrap (6).

The aim and effect of the decrees is to restrict exports of
the products concerned from the Russian Federation,
and they are therefore prejudicial to the Community's
steel
industry. Against a background of economic
recovery in world steel production, the tax on Russian
scarp exports means that the current pressure on the
price of scarp is further intensified. The international
price for scrap rose by some EUR 8 per tonne in the last
few months of 1999. Each additional euro represents
to the Community industry of around
extra costs
EUR 60 million.

(1) OJ L 300, 4.11.1997, p. 15.
(2) OJ L 268, 3.10.1998, p. 31.
(3) Commission Decision 97/742/ECSC (OJ L 300, 4.11.1997, p.

51).Text of Agreement (OJ L 300, 4.11.1997, p. 52).

(4) OJ L 327, 28.11.1997, p. 3.
(5) Decree No 441.

(9)

Appropriate trade sanctions are clearly necessary, there-
fore, for as long as the Russian Federation persists in this
breach of the Steel Agreement.

(6) Decree No 1198.

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Official Journal of the European Communities

31.3.2000

(10)

(11)

(12)

The Steel Agreement was concluded in the overall
framework of the partnership and Cooperation Agree-
ment. For the purposes of dispute settlement and trade
sanctions, therefore, the relevant procedures in the latter
apply in areas covered by the former.

In particular, under Article 107(2) of the Partnership and
Cooperation Agreement ‘if either Party considers that the
other Party has failed to fulfil an obligation under the
Agreement, it may take appropriate measures. Before so
doing, except in cases of special urgency, it shall supply
the Cooperation Council with all relevant information
required for a thorough examination of the situation
with a view to seeking a solution acceptable to the
parties’.

In accordance with that Article, the Community wrote
on 22 December 1999 to the President of the Co-
operation Council supplying all relevant
information
required for a thorough examination of the situation
with a view to seeking a solution acceptable to the
Parties, and also informing the Cooperation Council of
the Community's intention to adopt appropriate sanc-
tions against
its obligations under the bilateral Steel
Agreement and the PCA unless a solution i.e. withdrawal
of the tax on exports of scrap of Combined Nomencla-
ture heading 7204, was found within one calendar
month of the date on the letter. No solution acceptable
to the Parties was found during the consultations which
took place in Brussels on 2 to 3 February 2000.

(13) Annex IV of Decision No 2136/97/ECSC determines the
quantitative limits applicable to Community imports of
certain steel products from the Ruissian Federation.

(14) A reduction of 12 % in these limits for 2000 represents
a trade sanction of the order of EUR 20 million. Such a
measure therefore constitutes a proportionate response
to the infringement. In accordance with Article 107(2)
of the PCA, priority has been given in the selection of
these measures to those which least disturb the func-
tioning of the Agreement,

HAS ADOPTED THIS DECISION:

Article 1

The quantitative limits for 2000 in Annex IV to Decision No
2136/97/ECSC on administering certain restrictions on imports
of certain steel products from the Russian Federation are
replaced by those set out in the Annex to this Decision.

Article 2

The Commission shall take appropriate measures to repeal this
Decision once the Russian Federation has taken the necessary
its obligations under Declaration No 3,
measures to meet
attached to the Agreement between the European Coal and
Steel Community and the Russian Federation on trade in
certain steel products.

Article 3

This Decision shall enter into force the day following that of its
publication in the Official Journal of the European Communities.

This Decision shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 30 March 2000.

For the Commission

Pascal LAMY

Member of the Commission

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Official Journal of the European Communities

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ANNEX

Products

SA. Flat-rolled products

1.

Coils

1 (a) Hot rolled coils for re-rolling

2.

Heavy plate

3. Other flat rolled products

SB. Long products

1.

Beams

2. Wire rod

3. Other longs

(in tonnes)

2000

201 423

397 557

30 206

27 438

11 649

27 182

101 307